LSI Reports Fourth Quarter and Full Year 2012 Results
23% revenue growth year-over-year
SAN JOSE, Calif., Jan. 23, 2013 /PRNewswire/ -- LSI Corporation (NASDAQ: LSI) today reported results for its fourth quarter and full year ended December 31, 2012.
(Logo: http://photos.prnewswire.com/prnh/20120222/SF57952LOGO)
Fourth Quarter and Full Year 2012 Highlights
- Fourth quarter 2012 revenues from continuing operations* of $600 million, up 15% year-over-year
- Fourth quarter 2012 GAAP** income from continuing operations of $0.05 per diluted share
- Fourth quarter 2012 non-GAAP*** income from continuing operations of $0.18 per diluted share
- Fourth quarter 2012 operating cash flows of $95 million
- Full year 2012 revenues of $2.51 billion, up 23% year over year
First Quarter 2013 Business Outlook
- Projected revenues from continuing operations* of $535 million to $575 million
- GAAP** income from continuing operations in the range of ($0.03) to $0.06 per share
- Non-GAAP*** income from continuing operations in the range of $0.09 to $0.15 per share
|
* |
On May 6, 2011, LSI completed the sale of its external storage systems business. The financial results of the external storage systems business have been classified as discontinued operations in LSI's financial statements. Our ongoing business is referred to as "continuing operations." |
|
** |
Generally Accepted Accounting Principles. |
|
*** |
Excludes stock-based compensation, amortization of acquisition-related intangibles, purchase accounting effect on inventory, restructuring of operations and other items, net, gain on remeasurement of a pre-acquisition equity interest to fair value, gain/loss on sale/write-down of investments and, in the case of non-GAAP net income, gain from the sale of the external storage systems business. It also excludes the income tax effect associated with the above-mentioned items. |
"2012 was a year of exciting progress for LSI as we delivered 23% revenue growth, strong expansion in operating margin and earnings per share from continuing operations, and record design wins. We introduced several important new products, and customers are increasingly looking to new LSI solutions for mega datacenters, mobile networks and flash," said Abhi Talwalkar, LSI's president and CEO. "LSI's intelligent silicon offers proven solutions as businesses turn to the cloud and look for new ways to accelerate their ability to quickly analyze, store, share and protect data. While there is uncertainty in the macro environment and softness in some end markets, we are centered in dynamic new growth cycles that are expected to drive long-term growth in our flash, server and networking businesses."
Fourth quarter 2012 revenues from continuing operations were $600 million, in line with guidance, compared to $523 million generated from continuing operations in the fourth quarter of 2011, and compared to $624 million generated from continuing operations in the third quarter of 2012.
Fourth quarter 2012 GAAP** income from continuing operations was $29 million or $0.05 per diluted share, compared to fourth quarter 2011 GAAP income from continuing operations of $11 million or $0.02 per diluted share. Third quarter 2012 GAAP income from continuing operations was $40 million or $0.07 per diluted share. Fourth quarter 2012 GAAP income from continuing operations included a net charge of $72 million from special items, consisting primarily of approximately $30 million of amortization of acquisition-related items, $25 million of stock-based compensation expense, $16 million of net restructuring and other items, and $1 million income tax effect.
Fourth quarter 2012 non-GAAP*** income from continuing operations was $101 million or $0.18 per diluted share, compared to fourth quarter 2011 non-GAAP income from continuing operations of $73 million or $0.13 per diluted share. Third quarter 2012 non-GAAP income from continuing operations was $99 million or $0.17 per diluted share.
Cash and short-term investments totaled approximately $676 million at quarter end. The company completed fourth-quarter purchases of approximately 7 million shares of its common stock for approximately $46 million. In 2012 the company purchased approximately 36 million shares of its common stock for approximately $273 million.
LSI recorded full-year 2012 revenues from continuing operations of $2.51 billion, a 23% increase compared to $2.04 billion in 2011.
"We delivered solid profitability and results in 2012, making good progress on our gross margin targets and generating strong cash flows," said Bryon Look, LSI's CFO. "With a strong balance sheet, zero debt and $479 million remaining on our share buyback authorization, we are in a good position to continue to return capital to our shareholders."
|
LSI 1Q2013 Business Outlook for Continuing Operations | |||
|
GAAP** |
Special Items |
Non-GAAP*** | |
|
Revenue |
$535 million to $575 million |
$535 million to $575 million | |
|
Gross Margin |
48% to 52% |
$18 million to $28 million |
53% to 55% |
|
Operating Expenses |
$257 million to $277 million |
$32 million to $42 million |
$225 million to $235 million |
|
Net Other Income |
$4 million |
$4 million | |
|
Tax |
Approximately $8 million |
Approximately $8 million | |
|
(Loss)/Income from Continuing Operations Per Share |
($0.03) to $0.06 |
($0.09) to ($0.12) |
$0.09 to $0.15 |
|
Diluted Share Count |
570 million |
570 million | |
Capital spending is projected to be around $25 million in the first quarter and approximately $80 million in total for 2013.
Depreciation and software amortization is projected to be around $15 million in the first quarter and approximately $60 million in total for 2013.
LSI Conference Call Information
LSI will hold a conference call today at 2 p.m. PST to discuss fourth quarter and full year 2012 financial results and the first quarter 2013 business outlook. Internet users can access the conference call at http://www.lsi.com/webcast. Subsequent to the conference call, a replay will be available at the same web address.
Forward-Looking Statements: This news release contains forward-looking statements that are based on the current opinions and estimates of management. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause LSI's actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to: our ability to successfully integrate and manage the SandForce business and retain its key employees; our ability to achieve anticipated synergies and to develop integrated new products following our acquisition of SandForce; our ability to repurchase our common stock at prices we believe to be advantageous; our reliance on major customers and suppliers; our ability to keep up with rapid technological change; our ability to compete successfully in competitive markets; fluctuations in the timing and volumes of customer demand; the unavailability of appropriate levels of manufacturing capacity; and general industry and macro-economic conditions. For additional information, see the documents filed by LSI with the Securities and Exchange Commission, and specifically the risk factors set forth in the company's most recent reports on Form 10-K and 10-Q. LSI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About LSI
LSI Corporation (NASDAQ: LSI) designs semiconductors and software that accelerate storage and networking in datacenters, mobile networks and client computing. Our technology is the intelligence critical to enhanced application performance, and is applied in solutions created in collaboration with our partners. More information is available at www.lsi.com.
LSI, the LSI & Design logo and the Storage.Networking.Accelerated. tagline are trademarks or registered trademarks of LSI Corporation.
All other brand or product names may be trademarks or registered trademarks of their respective companies.
|
LSI CORPORATION | |||||
|
Condensed Consolidated Balance Sheets | |||||
|
(In millions) | |||||
|
(Unaudited) | |||||
|
December 31, |
September 30, |
December 31, | |||
|
Assets |
2012 |
2012 |
2011 | ||
|
Current assets: |
|||||
|
Cash and short-term investments |
$ 676.0 |
$ 643.0 |
$ 935.5 | ||
|
Accounts receivable, net |
264.1 |
256.5 |
246.5 | ||
|
Inventories |
206.3 |
209.1 |
180.0 | ||
|
Prepaid expenses and other current assets |
87.2 |
64.6 |
60.7 | ||
|
Total current assets |
1,233.6 |
1,173.2 |
1,422.7 | ||
|
Property and equipment, net |
269.7 |
250.2 |
180.6 | ||
|
Goodwill and identified intangible assets, net |
741.1 |
771.9 |
506.2 | ||
|
Other assets |
113.2 |
108.1 |
122.6 | ||
|
Total assets |
$ 2,357.6 |
$ 2,303.4 |
$ 2,232.1 | ||
|
Liabilities and Stockholders' Equity |
|||||
|
Current liabilities |
$ 506.9 |
$ 476.8 |
$ 460.9 | ||
|
Pension, tax and other liabilities |
684.6 |
628.6 |
712.2 | ||
|
Total liabilities |
1,191.5 |
1,105.4 |
1,173.1 | ||
|
Stockholders' equity: |
|||||
|
Common stock and additional paid-in capital |
5,578.7 |
5,579.6 |
5,629.2 | ||
|
Accumulated deficit |
(3,834.3) |
(3,863.4) |
(4,037.0) | ||
|
Accumulated other comprehensive loss |
(578.3) |
(518.2) |
(533.2) | ||
|
Total stockholders' equity |
1,166.1 |
1,198.0 |
1,059.0 | ||
|
Total liabilities and stockholders' equity |
$ 2,357.6 |
$ 2,303.4 |
$ 2,232.1 | ||
|
LSI CORPORATION | |||||||||
|
Consolidated Statements of Operations (GAAP) | |||||||||
|
(In thousands, except per share amounts) | |||||||||
|
(Unaudited) | |||||||||
|
Three Months Ended |
Year Ended | ||||||||
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, | |||||
|
2012 |
2012 |
2011 |
2012 |
2011 | |||||
|
Revenues |
$ 600,128 |
$ 623,962 |
$ 523,140 |
$ 2,506,087 |
$ 2,043,958 | ||||
|
Cost of revenues |
275,538 |
287,390 |
264,364 |
1,162,414 |
991,914 | ||||
|
Amortization of acquisition-related intangibles |
21,318 |
21,348 |
20,354 |
85,404 |
82,659 | ||||
|
Purchase accounting effect on inventory |
- |
- |
- |
14,458 |
- | ||||
|
Stock-based compensation expense |
2,858 |
2,573 |
1,597 |
11,946 |
6,921 | ||||
|
Total cost of revenues |
299,714 |
311,311 |
286,315 |
1,274,222 |
1,081,494 | ||||
|
Gross profit |
300,414 |
312,651 |
236,825 |
1,231,865 |
962,464 | ||||
|
Research and development |
165,758 |
156,318 |
139,061 |
643,230 |
552,342 | ||||
|
Stock-based compensation expense |
11,613 |
11,170 |
5,360 |
47,064 |
23,646 | ||||
|
Total research and development |
177,371 |
167,488 |
144,421 |
690,294 |
575,988 | ||||
|
Selling, general and administrative |
64,919 |
69,722 |
63,705 |
270,965 |
241,820 | ||||
|
Amortization of acquisition-related intangibles |
8,667 |
8,667 |
8,319 |
34,668 |
33,276 | ||||
|
Stock-based compensation expense |
10,291 |
13,643 |
4,881 |
49,290 |
20,343 | ||||
|
Total selling, general and administrative |
83,877 |
92,032 |
76,905 |
354,923 |
295,439 | ||||
|
Restructuring of operations and other items, net |
16,480 |
4,221 |
21,033 |
42,654 |
23,719 | ||||
|
Income/(loss) from operations |
22,686 |
48,910 |
(5,534) |
143,994 |
67,318 | ||||
|
Interest income and other, net |
7,606 |
5,855 |
8,124 |
37,711 |
26,472 | ||||
|
Income from continuing operations before income taxes |
30,292 |
54,765 |
2,590 |
181,705 |
93,790 | ||||
|
Provision for/(benefit from) income taxes |
1,202 |
15,100 |
(8,818) |
(20,960) |
3,778 | ||||
|
Income from continuing operations |
29,090 |
39,665 |
11,408 |
202,665 |
90,012 | ||||
|
(Loss)/income from discontinued operations, net of taxes |
- |
- |
(13,194) |
- |
241,479 | ||||
|
Net income/(loss) |
$ 29,090 |
$ 39,665 |
$ (1,786) |
$ 202,665 |
$ 331,491 | ||||
|
Basic income/(loss) per share: |
|||||||||
|
Income from continuing operations |
$ 0.05 |
$ 0.07 |
$ 0.02 |
$ 0.36 |
$ 0.15 | ||||
|
(Loss)/income from discontinued operations |
$ - |
$ - |
$ (0.02) |
$ - |
$ 0.42 | ||||
|
Net income/(loss) |
$ 0.05 |
$ 0.07 |
$ 0.00 |
$ 0.36 |
$ 0.57 | ||||
|
Diluted income/(loss) per share: |
|||||||||
|
Income from continuing operations |
$ 0.05 |
$ 0.07 |
$ 0.02 |
$ 0.35 |
$ 0.15 | ||||
|
(Loss)/income from discontinued operations |
$ - |
$ - |
$ (0.02) |
$ - |
$ 0.40 | ||||
|
Net income/(loss) |
$ 0.05 |
$ 0.07 |
$ 0.00 |
$ 0.35 |
$ 0.55 | ||||
|
Shares used in computing per share amounts: |
|||||||||
|
Basic |
552,761 |
555,197 |
563,721 |
559,459 |
585,704 | ||||
|
Diluted |
568,611 |
572,022 |
573,018 |
580,548 |
600,893 | ||||
|
Reconciliations of certain GAAP measures to non-GAAP measures are included below. |
|||||||||
|
Three Months Ended |
Year Ended | ||||||||
|
December 31, 2012 |
September 30, 2012 |
December 31, 2011 |
December 31, 2012 |
December 31, 2011 | |||||
|
Reconciliation of GAAP net income to non-GAAP net income: |
|||||||||
|
GAAP income from continuing operations |
$ 29,090 |
$ 39,665 |
$ 11,408 |
$ 202,665 |
$ 90,012 | ||||
|
Special items: |
|||||||||
|
a) Stock-based compensation expense - cost of revenues |
2,858 |
2,573 |
1,597 |
11,946 |
6,921 | ||||
|
b) Stock-based compensation expense - R&D |
11,613 |
11,170 |
5,360 |
47,064 |
23,646 | ||||
|
c) Stock-based compensation expense - SG&A |
10,291 |
13,643 |
4,881 |
49,290 |
20,343 | ||||
|
d) Amortization of acquisition-related intangibles - cost of revenues |
21,318 |
21,348 |
20,354 |
85,404 |
82,659 | ||||
|
e) Amortization of acquisition-related intangibles - SG&A |
8,667 |
8,667 |
8,319 |
34,668 |
33,276 | ||||
|
f) Purchase accounting effect on inventory |
- |
- |
- |
14,458 |
- | ||||
|
g) Restructuring of operations and other items, net |
16,480 |
4,221 |
21,033 |
42,654 |
23,719 | ||||
|
h) Gain on sale of investments |
- |
(2,550) |
- |
(2,550) |
- | ||||
|
i) Gain on re-measurement of a pre-acquisition equity interest to fair value |
- |
- |
- |
(5,765) |
- | ||||
|
j) Income tax effect |
833 |
- |
- |
(42,365) |
- | ||||
|
Total special items from continuing operations |
72,060 |
59,072 |
61,544 |
234,804 |
190,564 | ||||
|
Non-GAAP income from continuing operations |
$ 101,150 |
$ 98,737 |
$ 72,952 |
$ 437,469 |
$ 280,576 | ||||
|
Non-GAAP income from continuing operations per share: |
|||||||||
|
Basic |
$ 0.18 |
$ 0.18 |
$ 0.13 |
$ 0.78 |
$ 0.48 | ||||
|
Diluted |
$ 0.18 |
$ 0.17 |
$ 0.13 |
$ 0.75 |
$ 0.47 | ||||
|
GAAP net income/(loss) |
$ 29,090 |
$ 39,665 |
$ (1,786) |
$ 202,665 |
$ 331,491 | ||||
|
Special items: |
|||||||||
|
a) Total special items from continuing operations |
72,060 |
59,072 |
61,544 |
234,804 |
190,564 | ||||
|
b) Stock-based compensation expense - discontinued operations |
- |
- |
- |
- |
(592) | ||||
|
c) Amortization of acquisition-related intangibles - discontinued operations |
- |
- |
- |
- |
886 | ||||
|
d) Restructuring of operations - discontinued operations |
- |
- |
(67) |
- |
40,863 | ||||
|
e) Gain on sale of business |
- |
- |
- |
- |
(260,066) | ||||
|
Non-GAAP net income |
$ 101,150 |
$ 98,737 |
$ 59,691 |
$ 437,469 |
$ 303,146 | ||||
|
Non-GAAP net income per share: |
|||||||||
|
Basic |
$ 0.18 |
$ 0.18 |
$ 0.11 |
$ 0.78 |
$ 0.52 | ||||
|
Diluted |
$ 0.18 |
$ 0.17 |
$ 0.10 |
$ 0.75 |
$ 0.50 | ||||
|
Shares used in computing non-GAAP per share amounts: |
|||||||||
|
Basic |
552,761 |
555,197 |
563,721 |
559,459 |
585,704 | ||||
|
Diluted |
568,611 |
572,022 |
573,018 |
580,548 |
600,893 | ||||
|
LSI CORPORATION | |||||||||
|
Consolidated Statements of Cash Flows | |||||||||
|
(In thousands) | |||||||||
|
(Unaudited) | |||||||||
|
Three Months Ended |
Year Ended | ||||||||
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, | |||||
|
2012 |
2012 |
2011 |
2012 |
2011 | |||||
|
Operating activities: |
|||||||||
|
Net income/(loss) |
$ 29,090 |
$ 39,665 |
$ (1,786) |
$ 202,665 |
$ 331,491 | ||||
|
Adjustments: |
|||||||||
|
Depreciation and amortization |
44,166 |
45,671 |
43,357 |
180,484 |
189,200 | ||||
|
Stock-based compensation expense |
24,762 |
27,386 |
11,838 |
108,300 |
50,318 | ||||
|
Non-cash restructuring of operations and other items, net |
221 |
698 |
4,747 |
5,960 |
35,282 | ||||
|
Gain on sale of investments/write-down of investment |
- |
(2,550) |
183 |
(2,550) |
183 | ||||
|
Gain on re-measurement of a pre-acquisition equity interest to fair value |
- |
- |
- |
(5,765) |
- | ||||
|
Gain on sale of business |
- |
- |
- |
- |
(260,066) | ||||
|
(Gain)/loss on sale of property and equipment |
(46) |
2,644 |
78 |
2,528 |
(465) | ||||
|
Unrealized foreign exchange (gain)/loss |
(518) |
2,655 |
(2,215) |
(598) |
(2,015) | ||||
|
Deferred taxes |
(10,743) |
(72) |
(9,894) |
(53,989) |
(28,838) | ||||
|
Changes in assets and liabilities, net of assets acquired and liabilities |
|||||||||
|
assumed in business combination: |
|||||||||
|
Accounts receivable |
(7,620) |
40,348 |
1,850 |
(6,689) |
80,065 | ||||
|
Inventories |
2,748 |
(5,091) |
30,399 |
(2,116) |
(29,804) | ||||
|
Prepaid expenses, assets held for sale and other assets |
(13,308) |
1,110 |
(526) |
(14,028) |
(10,782) | ||||
|
Accounts payable |
23,208 |
(25,186) |
(2,179) |
27,543 |
(3,879) | ||||
|
Accrued and other liabilities |
2,895 |
(15,471) |
(20,436) |
(67,586) |
(103,915) | ||||
|
Net cash provided by operating activities |
94,855 |
111,807 |
55,416 |
374,159 |
246,775 | ||||
|
Investing activities: |
|||||||||
|
Purchases of debt securities available-for-sale |
(37,206) |
(22,087) |
(12,284) |
(131,662) |
(50,967) | ||||
|
Proceeds from maturities and sales of debt securities available-for-sale |
28,320 |
11,767 |
5,472 |
57,843 |
37,460 | ||||
|
Purchases of other investments |
(500) |
- |
- |
(500) |
(4,000) | ||||
|
Proceeds from sale of other investments |
- |
2,550 |
- |
2,550 |
- | ||||
|
Purchases of property and equipment |
(27,494) |
(25,667) |
(14,079) |
(130,779) |
(60,920) | ||||
|
Proceeds from sale of property and equipment |
67 |
1,374 |
22,683 |
1,693 |
23,622 | ||||
|
Acquisition of business, net of cash acquired |
- |
- |
- |
(319,231) |
- | ||||
|
Proceeds from sale of business, net of transaction costs |
- |
- |
- |
- |
475,150 | ||||
|
Proceeds from maturity of a note receivable |
- |
- |
10,000 |
- |
10,000 | ||||
|
Net cash (used in)/provided by investing activities |
(36,813) |
(32,063) |
11,792 |
(520,086) |
430,345 | ||||
|
Financing activities: |
|||||||||
|
Issuance of common stock |
20,985 |
8,515 |
14,980 |
111,628 |
81,040 | ||||
|
Purchases of common stock under repurchase program |
(46,338) |
(50,062) |
(26,999) |
(272,585) |
(498,786) | ||||
|
Net cash used in financing activities |
(25,353) |
(41,547) |
(12,019) |
(160,957) |
(417,746) | ||||
|
Effect of exchange rate changes on cash and cash equivalents |
(1,668) |
166 |
(528) |
(1,399) |
(1,349) | ||||
|
Net change in cash and cash equivalents |
31,021 |
38,363 |
54,661 |
(308,283) |
258,025 | ||||
|
Cash and cash equivalents at beginning of period |
440,507 |
402,144 |
725,150 |
779,811 |
521,786 | ||||
|
Cash and cash equivalents at end of period |
$ 471,528 |
$ 440,507 |
$ 779,811 |
$ 471,528 |
$ 779,811 | ||||
SOURCE LSI Corporation
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